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Weak public option is acceptable to ensure health care reform

According to his own account, Rep. John Salazar played a major role in shaping the public option included in the House version of the Affordable Health Care for America Act passed over the weekend. The result is a weaker bill than progressive Democrats wanted, but it may be the only approach that has any chance of surviving in the Senate.

During the summer and early fall, Salazar seemed to be waffling on supporting any public option in the health care reform bill. While in some statements he seemed to favor a government-run health plan to ensure competition with private insurance, other times he suggested that cooperatives could be a viable alternative to a public plan. His most consistent position was that he would support a government-run plan only if it was “the only way to pass (health care) reform,” as he told The Daily Sentinel last month.

But what appeared to be indecision turns out to be strategy. Salazar “never distanced himself from the public option” he explained to the Sentinel’s Gary Harmon. Instead, Harmon reports, Salazar “used his position with the 55-member Blue Dog coalition to accomplish reform that would help rural America.”

In a Web-page letter to constituents, Salazar writes, “At my request, the speaker and the White House included negotiated rates which greatly benefit rural America and districts like the 3 that are disadvantaged by the current system. I also asked, and it was included, that the Secretary (of Health and Human Services) be allowed to negotiate prescription drug prices with manufactures — a move that will save us billions of dollars.”

Empowering government to negotiate prescription drug prices has long been a Democratic Party goal, and its inclusion strengthens the bill. In 2007, majorities in both the House and Senate favored negotiation of prescription drug prices. The House even passed a bill requiring negotiation, but it was denied a vote in the Senate by a Republican filibuster.

As Salazar points out, negotiated prescription drug prices could save billions of dollars, contributing to the reductions essential to keeping the bill within budget limits.

Negotiating drug prices will benefit all Americans covered under government health plans like Medicare, Medicaid, and the proposed public option, if it remains in a final bill.

But, while requiring negotiated prescription drug prices adds an important provision to the bill, the plan to negotiate payments to health care providers meets the needs of rural communities at the expense of urban centers,

Under the “robust” public option supported by progressive Democrats, health care providers would be reimbursed at Medicare rates plus 5 percent. By contrast, the watered-down Blue Dog version of the public option included in the final House bill requires the federal government to negotiate rates with doctors and hospitals just as private insurers do.

A non-partisan Congressional Budget Office preliminary analysis finds that by removing the connection to Medicare rates, the public option would lose its only competitive advantage over private insurance companies. While it will expand access to health care, it will do little to reduce the cost of to consumers. It could even increase costs, depending on how negotiations with providers turn out.

Salazar and the Blue Dogs have a legitimate concern that, under the Medicare plus 5 percent plan, the geographically adjusted Medicare rates will not be sufficient to sustain hospitals and medical providers in rural communities. These problems must be addressed, but the best answer is a not a one-size-fits-all rate structure that will do little to lower consumer costs.

Initially, progressive House members threatened to defeat a weak public option, but in the end they capitulated to political reality and accepted the Blue Dog revisions. Better a flawed public option than none at all, they reasoned.

Though far from a perfect bill, the House version of the Affordable Health Care for America Act is a good start toward providing affordable health care to all Americans. If the Senate passes a similar bill, even with the weaker public option, it will be the most important advancement in health care since Medicare was enacted in 1965.